How To Start a Business in Fayetteville

Sales Tax and State Sales Tax Permits:

For vendors selling property or services, they are required to apply for a sales tax permit and collect and remit sales tax to the state. 

Arkansas Sales Tax permits may be applied for online or you may submit an application using Form AR-1R.  You may download the form at: http://www.dfa.arkansas.gov/atap/Documents/ar1r.pdf

                             

Taxes vary based on the type of business you are operating—the three most common businesses are grocery; retail; and restaurant, hotel, and motel (HMR)—scenarios on these areas are provided below.  No matter what business you are in, the City Sales Tax is always 2%, and if the business is one in which the hotel, motel, and restaurant tax applies, then there is an additional 2% HMR tax. 

There are additional taxes depending on the business segment in which you are intending to operate (such as, aviation, fuel, tobacco, liquor, etc.).  For more information on Arkansas Sales Tax Permits and details on particular Arkansas taxes related to particular businesses, please visit the Arkansas Department of Finance and Administration website.

                            

 

Example Sales Tax Scenarios

Grocery Store Tax Structure:

State Sales Tax           1.50%
(grocery store rate)

County Sales Tax        1.25%

City Sales Tax             2.00%

Total                   4.75%

Regular Retail Tax Structure: 

State Sales Tax          6.00%
(grocery store rate)

County Sales Tax       1.25%

City Sales Tax            2.00%

Total                  9.25%

Sales Tax and Hotel, Motel, and Restaurant (HMR) Tax Structure:

State Sales Tax           6.00%
(grocery store rate)

County Sales Tax        1.25%

City Sales Tax             2.00%

City HMR                     2.00%
(Hotel/Motel & Restaurant)

Total                11.25%